In a dour housing market, wouldn't it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine's "Cost Vs. Value Report for 2008-2009," let's look at some of the best projects you can undertake and recoup the majority of your cost. (Home price appreciation is not assured. Can you withstand the volatility in this market? Read Why Housing Market Bubbles Pop to find out.)
Upscale Projects

  1. Siding Replacement (fiber-cement or foam-backed vinyl). With the economic slump, home buyers aren't being dazzled by bells and whistles as much as they are improvements that will ensure lower repair and utility bills. Although replacing current siding with fiber-cement has lost value from 2007, you can still expect to net approximately 87% of your cost when you go to sell.. If you prefer a foam-backed vinyl product replacement instead, you can still look to recoup 80% of your cost.

  2. Window Replacement (vinyl or wood). Windows are not only an aesthetic feature. For most homeowners, they represent one of the easiest ways to lower home heating and cooling bills. By replacing your current windows with more efficient vinyl or wood ones, you can save on your utility bills, attract future home buyers and recoup nearly 80% (vinyl) or 77% (wood) of the total cost.

  3. Bathroom Remodel. Depending on the size and amenities of your desired bathroom, you could expect to pay over $50,000 to tear out walls, repair joists and wall studs, change structural elements and make major layout changes, such as switching a toilet and shower. However big the price tag, you can still expect to recoup nearly 71% of the cost (which would be $36,400 if you have a $50K bill) when you go to sell. This project increased its value since 2007, while its sister project – adding a complete bathroom – fell in value.

  4. Major Kitchen Remodel. Kitchens are typically the most frequently used room in a home, so it makes sense that investing money here is going to pay off when it comes time to sell. While a major kitchen renovation is usually the most time-consuming and expensive home improvement job (averaging more than $110,000), it's also one of the most profitable. Regardless of the size of your financial layout, you can expect to make 71% of the cost back at resale time.

  5. Deck Addition (composite product). With families cutting their entertainment budgets, they're spending more time at home, so it makes sense that adding a deck (composite, not wood) is a good investment. You can plan on recouping 63% of your total job cost to boost your home's value by nearly $24,000 if you paid the average job cost of $37,000.

Mid-Range Projects
While all of the mid-range projects dropped in value versus cost since 2007, there are still numerous projects that will help you improve your home's value. Here are a few of the best bets for your money:

  1. Deck Addition (wood). If your bank balance can't swing the higher price tag that comes with composite decking, you may still be able to afford a wood addition on to your home. While a wood deck would cost you, on average, in the neighborhood of $10,000, the resale value it will add to your home is more than $8,600.

  2. Siding Replacement (vinyl). Fiber-cement or foam-banked vinyl are often more preferable siding upgrades, but getting vinyl siding replacements instead is still a good choice. You can recoup nearly 81% of your cost which, if the job cost you more than $10,000, means you could add more than $8,200 to your home's value.

  3. Minor Kitchen Remodel. With belt-tightening in style, people are turning to minor kitchen improvement projects instead of major overhauls. It turns out that that choice is not only frugal, but financially wise. While homeowners can still expect to recoup 70% of the cost for major kitchen remodeling jobs, homeowners can recoup even more - 79.5% - for minor kitchen remodeling jobs.

  4. Attic Bedroom. Anytime you can add bedrooms, you're going to add to the overall value – and listed purchase price – to your home. If your attic's dimensions allow you to convert it to a bedroom, you may want to consider investing the money to do so. You'll add some sleeping space and recoup 74% of the money you spent when a new buyer puts your home under contract.

  5. Basement Remodel. If you're fortunate enough to live in an area with a water table high enough to permit basements, you should think about squeezing all the value you can out of it. By remodeling and finishing a previously-unfinished basement you can expect to get nearly 73% of your investment returned with a higher list price, come time to sell.

If you have savings or access to reasonably-priced credit, it's worth it to consider home improvement projects that will produce the best return for your time and money. Make sure you work with a reputable, licensed contractor (to avoid costly errors or budget overruns), and before you undertake any project it's a good idea to check and see if it could significantly increase your property tax bill.

While it may still make sense in the long-run to undertake the project and add overall value to your home, you may need to make a few budgetary changes so that you don't get caught off-guard when the tax bill comes. (Break the credit catch-22; read How To Establish A Credit History.)

Related Articles
  1. Home & Auto

    7 Absolute No-Nos When Selling a Home

    Avoid these mistakes if you’re looking to make a quick and easy home sale.
  2. Entrepreneurship

    Top 10 Features Of a Profitable Rental Property

    Find out which factors you should weigh when searching for income-producing real estate.
  3. Stock Analysis

    Home Depot: Can its Shares Continue Climbing?

    Home Depot has outperformed the market by a wide margin in the last 12 months. Is this sustainable?
  4. Home & Auto

    How Property Taxes Are Calculated

    Property taxes are calculated through use of the mill levy and the assessed property values.
  5. Home & Auto

    Understanding Property Deeds

    A property deed is an instrument that enables sellers to convey real property to buyers, who become the new owners.
  6. Home & Auto

    5 Reasons Zillow's Estimates Could Be Wrong

    Zillow uses a variety of data to calculate its "Zestimates," but anything from the wrong property details to missing upgrades can make them inaccurate.
  7. Home & Auto

    Why You May Not Be Ready To Buy a Home

    Many dream of home ownership, but the timing should be right. There are a host of reasons why you may want to put off homeownership for awhile.
  8. Home & Auto

    New Construction’s Hidden Costs Can Burn Buyers

    A new home may be appealing in many ways, but it can also burn buyers with numerous hidden costs. Here are a few things to watch for.
  9. Stock Analysis

    Will Clorox (CLX) Continue to Clean Up?

    Clorox might not be the most exciting company, but sometimes boring is best for long-term investors.
  10. Home & Auto

    Buy a House in the Philippines: A How-To Guide

    Foreign-ownership regulations make it a little tricky, but plan right and you can have a home in paradise.
  1. How can I obtain an abatement for property taxes?

    Depending on where your property is located, your local city or county government may offer a property tax abatement program. ... Read Full Answer >>
  2. How do taxes impact Net Operating Income (NOI)?

    Net operating income (NOI) is a before-tax figure and does not take into account income taxes, loan payments, capital expenditures, ... Read Full Answer >>
  3. In which US cities do high-income earners pay the most tax?

    There are several different ways that cities tax high-net-worth (HNWIs) individuals. The most direct and obvious method is ... Read Full Answer >>
  4. What's the difference between regressive and progressive taxes?

    The U.S. federal tax system and local and state tax systems are complex in that they combine progressive, regressive and ... Read Full Answer >>
  5. Do mortgage escrow accounts earn interest?

    A bank is not required to pay interest on any escrow accounts (also mortgage impound accounts) it holds for its customers. ... Read Full Answer >>
  6. What are the three "nets" of an NNN lease?

    A triple net (NNN) lease is a type of real estate lease in which the tenant is responsible for paying the building's property ... Read Full Answer >>

You May Also Like

Trading Center